Final Budget Doesn't Close Tax Breaks, Instead Extends and Creates New Ones

Despite over a billion dollars of proposed revenue solutions on the table over the course of the legislative session, policymakers chose to protect special interest tax breaks over families and seniors.

Lawmakers even went the wrong direction by doling out roughly $15 million dollars in additional tax breaks. In total 17 loopholes were either newly enacted or extended including cover charges for dance clubs and the use of fuel used in oil refineries or other manufacturing and extraction plants.

The final revenue agreement is in sharp contrast to proposals put forward by both the House and the Governor earlier in session. Over $1.3 billion dollars in revenue options were on the table, including the extension of current B&O and beer surcharges along with over $750 million in suggested loophole closures, none of which were closed, and some were even renewed in the final budget. These are resources that could have been used to more adequately fund education or prevent over $180 million in cuts to programs like WorkFirst or the Housing and Essential Needs program – services that help Washingtonians find and keep work through job search assistance or worker training programs.

Policymakers did make technical fixes to revenue collections. Adjustments to the way we collect tax revenue were made to avoid future revenue loss. These are important actions, but they do not generate new revenue to meet growing needs, they just keep us even:

In response to a court ruling (Bracken v State), an estate tax loophole, which would have allowed married couples to avoid paying the tax, is eliminated, gaining $160 million

To avoid a future lawsuit and potential loss of revenue, equity is established in the taxes paid by residential, wireless, and cable telephone services, raising $85 million

The final budget agreement was a Band-Aid measure that failed to generate the resources needed to make the long-term investments that create jobs and build the middle class. Moving forward, policymakers must choose to close loopholes over special interests.

Watch the Budget Matters Plenary

View the Budget Matters 2016 conference plenary panel, "What's at Stake in the 2017-2019 Budget: Funding McCleary and Beyond," on TVW. Moderated by Ann Dornfeld of KUOW with a budget overview by our own Andy Nicholas, the panel features Nathan Gibbs-Bowling, the 2016 Washington State Teacher of the Year; Lew Moore of the Washington Research Council; Roxana Norouzi of OneAmerica; and Sen. Christine Rolfes. The plenary starts after a brief intro by Executive Director Misha Werschkul and an intro video by Gov. Inslee.

Our Legislative Agenda

Our agenda for the 2015-2017 biennium calls for an equitable, sustainable revenue system in addition to state investments that: promote a world-class education system; sustain a strong middle class; produce living-wage jobs, and ensure that all Washingtonians have equal opportunity to get ahead.

Testimonies in Olympia

We testified in support of a number of important bills during the 2016 legislative session. Take a look:

Our testimony (at the 23:23 minute mark) on the House Bill that would take a two-generation approach to preventing poverty

Our testimony (at the 1:54:09 mark) on the House bill focused on aerospace-related tax breaks